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Question
The directors of Acme Corp. unanimously approved a merger agreement between Acme and Generic, Inc. The MBCA is in effect in the state where both corporations were incorporated. The two corporations begin performing the various duties set out in the merger agreement. Certain shareholders of Acme then institute suit in an effort to block the merger agreement from being implemented. The shareholders maintain that the proposed merger should have been submitted to them for approval. Nothing in Acme's articles of incorporation requires the directors to submit such matters to the shareholders. The directors claim that the merger was carefully considered and is in the best interests of the corporation. Under these circumstances:
A. the directors will prevail if they can prove that the merger was in the corporation's best interests.
B. the shareholders will be successful in their suit because under the MBCA, approval of all classes of shares is required for a merger or consolidation.
C. the directors will prevail because the MBCA gives them the right to overrule the shareholders' decisions in mergers.
D. the shareholders will not be successful in their suit because the directors have acted in the best interests of the corporation.
Answer
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